Silvio Berlusconi took a calculated risk in moving the 2009 G-8 summit from the tony Mediterranean island of La Maddalena, off Sardinia, to the earthquake-stricken city of L’Aquila, an hour from Rome. Had the heads of state convened off Sardinia, the focus would no doubt have been on Berlusconi’s lavish villa nearby and the headline-making photos of the racy parties he has hosted there.

“Italians like me this way,” he told one of his news outlets recently. “I have never paid for sex,” he told another. “There is no pleasure without conquest.”

Thanks to a new round of revelations from some of the women who attended those parties—in a professional capacity, they claim, for a €1,000 per diem—in L’Aquila this week, the focus is still on those parties. But the G-8 leaders here are at least temporarily distracted by the challenges of trying to conduct diplomacy among the ruins created by a devastating earthquake three months ago that left 300 dead and 65,000 people homeless.

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Italy was widely criticized for logistical shortcomings in the days leading up to this global event. A British newspaper even suggested that Italy didn’t deserve to be part of the G-8 and should be replaced by Spain, based on its inability to stage the summit properly. But as world leaders surveyed the quake damage, Berlusconi’s plan appeared to be paying off. Any glitches in the arrangements were easy to forgive against a backdrop of rubble.

In fact, as world leaders arrived in Italy on Wednesday, they each toured a different area in the striken region, which ensured that the world’s media would pan across the destruction. German Chancellor Angela Merkel was visibly shaken as she walked through the flattened city of Onna, pausing several times to stare at crumbled churches and houses. President Barack Obama rolled up his sleeves as he toured the city of L’Aquila with Berlusconi and Italy’s civil protection chief, stopping in front of the former government building called the Palazzo del Governo to stare at the wreckage and pose with workers.

“Our thoughts and prayers are with the family members who lost loved ones here,” he said. Huge white letters spelling out “Yes We Camp” played on Obama’s election mantra on a nearby hill, where thousands of local residents are still living in tents.

Before the leaders met for a working lunch, they were briefed not on the ambitious summit agenda that includes everything from the economic crisis to climate change but on detailed evacuation plans.

This region is still a seismic hot spot. A 4.1 magnitude tremor shook the region last Friday, and Italy’s civil-protection force has promised to whisk the leaders to Rome if the tremors are stronger than that. For now, they are housed in a reinforced police academy very short on luxury appointments, but Berlusconi personally promised that the leaders would be safe “even if another quake strikes.” Journalists who have been inside the compound say it feels a bit like summer camp, with plastic tables on the lawn and astroturf to dress things up a bit.

Nevertheless, Berlusconi’s armor is showing visible cracks. The scandal-ridden prime minister, who has beaten a half-dozen corruption charges in his two-decade political career, is facing his biggest challenge to date with charges that he paid high-priced prostitutes to staff orgies at his Sardinian villa. He has answered the charges by dodging them. “Italians like me this way,” he told one of his news outlets recently. “I have never paid for sex,” he told another. “There is no pleasure without conquest.”

His excuses are not going over well with the leaders—or with their spouses. These international summits are archaically organized, with the leaders attending high-level meetings and their spouses attending cultural events organized by the host country’s first lady.

But because Berlusconi’s wife is divorcing him over rumors that he was involved with an 18-year-old lingerie model in Naples, he was forced to assign the role of hostess to a trusted colleague. In true form, he chose 33-year-old Mara Carfagna, a former topless model who serves as his equal-opportunities minister, and with whom he has been rumored to be romantically involved. He once told her at a public meeting, “If I weren’t already married, I’d run off with you immediately.”

But even if his political future is in question, the 72-year-old prime minister did succeed in bringing attention and money to this area. Funds earmarked for G-8 events have ensured that basic infrastructure such as roads and utilities are in place here.

Libyan leader Colonel Muammar Gaddafi, who is attending the meeting as part of an African delegation, has pitched his signature Beduoin tent in a field adjacent to the police quarters where the leaders are staying. But when the summit is over, he will fold up his tent and go home. For the thousands of displaced residents of this region who aren’t expected to have permanent housing until September at the earliest, their tents will remain long after the world leaders have departed.

Barbie Latza Nadeau has reported from Italy for Newsweek magazine since 1997. She also writes for CNN Traveller, Budget Travel magazine and Frommer's.